Proskauer funds team to drive SJ Berwin talks

Proskauer Rose’s funds team has emerged as the driving force behind the proposed merger with SJ Berwin, according to sources familiar with the ­situation.

It was revealed last week (TheLawyer.com, 6 May) that the two firms have entered into early-stage discussions around a ­potential tie-up following the news that another US suitor, Orrick Herrington & Sutcliffe, pulled out of talks with the City firm.

The key advocates in the Proskauer funds practice are alumni of Testa Hurwitz & Thibeault, the Boston firm that dissolved in 2005 and with which SJ Berwin enjoyed a close relationship in the early 2000s. They include co-head of corporate Robin Painter and funds co-head David Tegeler.

One partner familiar with the firm said: “The funds group in Boston will be ­pretty keen, but beyond that there’s not much ­[geographical] overlap.”

The audacious play would put a merged firm into the global top 30, with a ­combined revenue of approximately £620m. SJ Berwin’s desire to become a global player in funds work is in contrast to Hogan Lovells’ full-service approach.

A narrower focus would have the distinct brand advantage, with SJ Berwin reverting to its ­international strategy of the late 1990s, which saw it acquire funds practices in Germany and France.

However, some have already questioned the logic of the tie-up.

“Proskauer have never really done much outside of America. They’ve dabbled, but they haven’t developed an international strategy,” said one former SJ Berwin partner.

Between July 2007 and September 2008 Proskauer established offices in ­London, Paris, Beijing, Hong Kong and São Paolo. However, none of these practices have partner ­headcounts in double ­figures.

The move would represent a U-turn for the New York firm, which has been trying to build in London through laterals since failed talks with Richards Butler in 2005. The most recent hire saw Travers Smith funds chief Robert Barry join last September.

SJ Berwin needs to expand in the U.S. in order to become a top tier firm and organic expansion would be too dilutive to PEP and too slow.

Proskauer equally needs to expand in Europe where it is grossly sub-scale.

The combined firm will be a global force in funds and will have the resources to then expand in Asia.

It is very curious how many law firms make a great deal of their money by advising their clients on mergers but then seem to believe that mergers are a bad thing for them. Many firms seem to even take a perverse pride in the fact that they have never merged.

Law is no different to every other sector of the economy – there are economies of scale.

Look at what Goodwin has accomplished after two years in London — absolutely f-all. Still only three American lawyers. Even SJB realise that is pathetic. The Goodwin management can’t even figure out which way to point the plane to get to London

For the person who said, “Why in the world would an excellent firm like Goodwin’s want SJ Berwin? They could simply pick and choose the finer pieces.”

An ‘excellent’ firm isn’t going to make a stupid decision; otherwise it would be fair to say they were not excellent. Therefore it is fair to conclude that Berwins are a decent option for a tie up, unless of course the person who made this comment knows far better and knows so much that one could infer they work for Berwins. If they don’t work for Berwins what makes them so sure they fully understand their capabilities? Perhaps they are another idiot who thinks they know everything without being personally involved.

In response to the question why would anyone want to merge with SJB, SJB has the best private equity funds practice in Eurpose by a considerable distance and it already serves the biggest private equity groups. It completes around 20 private equity deals a year with A&O, its closest competitor on three. Given the chance to put that on a global scale then why would any firm not want to merge with SJB?

This leads me onto my next respons to the statement that SJB is in decline. Based on its huge presence in private equity, following a financial crises of this scale, it is always going to decline in these times, along with everyone else. However, as soon as the market picks back up to full speed SJB will continue its unprecedented growth.